BusinessDay contributing editor

The private capital investment trend series graph is a magnificent beast – surging ever higher, carrying Australia on the resources industry's back for the past two years, safely on track to deliver an unprecedented $173 billion or so worth of investment in Australia's productive future.

But the Australian Bureau of Statistics' record of the capex spend in the September quarter isn't the most important part of today's release – it's the dip in expectations about how much will be invested by the end of this financial year.

The beauty of the capex survey is that it asks the nation's CFOs not just what they have spent, but what they think they will spend. The latest survey shows a 3.3 per cent dip from their intentions three months earlier, with most of that coming from an 8.1 per cent pull back in mining.

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A three per cent or so change in overall expectations in one direction or the other is nothing to get excited about – it's close to normal – but the 8 per cent movement in mining is hefty – a contraction of nearly $10 billion from the $120 billion the mining CFOs nominated in June as their spend for 2012-13.

It's still a whopping 17 per cent higher than what they were planning at this time last year – the investment phase of the commodities boom definitely isn't over - but it's further confirmation of more realistic expectations as the bubble phase of the boom is blown away.

Combined with yesterday's Bureau of Resource and Energy Economics' figures, the story remains one of growth in the resources sector, but not at the breakneck speed we had become accustomed to in the bounce back from the GFC. The nation's CFOs are sticking to the script suggested in the Reserve Bank's commentary and thus the RBA can be expected to continue to look to stimulating the non-resources economy ahead of further cooling in capex growth in 2013-14.

While mining intentions are the big mover from the June to the September quarters, the biggest fall from last year to this is in the manufacturing sector. The manufacturing CFOs told the ABS they will invest $11.4 billion this financial year – the same as they said in June. But that's down 17.7 per cent from the record 2011-12 manufacturing capex.

Today's figures are more about confirmation than illumination, nothing to change any announced policy. And the policy in the headlights right now is what the RBA will do with interest rates next week. The easing bias remains in place.

Michael Pascoe is a BusinessDay contributing editor.

26 comments

Pascoe, are you ever going to realise that the "boom" is finished? You can put sultanas in a turd but it is still a turd...

Commenter

Les

Date and time

November 29, 2012, 1:04PM

Les, your tone suggests that you think there's no investment boom at all... (and then you talk about turds for some reason ...?)

I'm not sure how you can dispute the fact that we're in an investment boom. I mean, the terms of trade are at multi-generation highs. They're so high you'd probably have to go back to the gold rush to find it any stronger. If you HALVED the numbers, we'd still be in a boom...

Pascoe at least attempts to make a valid point.. while you've been successful in sounding like angry ol' denialist.. Try and make a point next time, rather than contributing nothing but drivel

Commenter

Chopt

Location

OutWest

Date and time

November 29, 2012, 1:44PM

Les,You must have the definition of a boom different to the average person, because the level of investment continuing to go into the mining industry as well as the general industries is still very high by any standard.The prices for coal and iron are way above prices from a decade ago and will continue at these sort of levels for years to come.True, the amount of grwoth in investment has decreased and has reached its peak but the actual volumes are still very large and will continue, albeit at a slower rate

Commenter

Econorat

Location

Sydney

Date and time

November 29, 2012, 1:48PM

"The prices for coal and iron are way above prices from a decade ago and will continue at these sort of levels for years to come."

Nope, prices will continue their downward trajectory. The boom is over and the benefits of the boom were wasted on cost blow outs and overcapitalisation.

Commenter

Allan

Location

Prahran

Date and time

November 29, 2012, 2:41PM

@Alan, of course prices are coming down and windfall fortunes have become a thing of the past, but mining companies have pumped billions into new towns and infrastruture that will change the face of this country for many years to come.

Commenter

Jezz

Date and time

November 29, 2012, 2:58PM

If $173 billion of new investment and almost $400 billions to come - is not a boom, then what else?

Commenter

Amazing

Location

Melbourne

Date and time

November 29, 2012, 3:34PM

"mining companies have pumped billions into new towns and infrastruture that will change the face of this country for many years to come

When the resources are gone that infrastructure and those new towns will disappear as well.

Commenter

Allan

Location

Prahran

Date and time

November 29, 2012, 4:09PM

We don't need more money pouring in (and all tax deductible) to open up marginal mining operations and undercutting the commodity prices of the existing mines that actually pay tax on their output.

The sooner we get over this expansion of mining and actually cash in on the existing profitable mines the better for our exchange rate and tax revenue.

Commenter

DC

Location

Melbourne

Date and time

November 29, 2012, 1:06PM

I read this guy's column when I want to see what's NOT going to happen. MP is a great contradindicator.

Commenter

Revert2Mean

Date and time

November 29, 2012, 1:11PM

The boom is huge and it won't stop anytime soon, but it will rely on taking the lead from investors. And right now if you follow the money- and its not going into Mining or MIning services. Whats hot at the moment? Shopping Centres Australasia (opens at a premium) Djerriwarh (22% premium) AFI/ Whitefield notes (10% premium) Mirabooka (5% premium). Contango MIdCap Income is another LIC and its IPO closes next week....offering 7.2%pa. MYOB Notes also closes next week offering 6.8%. No doubt they'll go to a premium. As will every hybrid that follows. Known income streams, vs fingers crossed on growth. And this is before interest rates fall again. Living off your Cash is a hard thing to do.